In Mumbai, banks are facing a challenging scenario as credit growth continues to surpass deposit mobilization, leading to potential upward pressure on deposit rates. According to the latest data from the Reserve Bank of India, deposit rates have adjusted close to 100 basis points in response to a 125 basis point reduction in the repo rate, indicating that banks have largely passed on rate cuts to depositors. Analysts like Jignesh Shial from Ambit Capital suggest that the current liquidity constraints and macroeconomic uncertainties limit further reductions in deposit rates. Furthermore, persistent inflation, exacerbated by geopolitical tensions in the Middle East, could prompt the Reserve Bank of India to increase the repo rate, which would subsequently push term deposit rates higher. Over the period from 2023-24 to December 2025, deposits are projected to grow by 9%, while credit is expected to expand by 11.3%. This ongoing trend of credit outpacing deposit growth has persisted for more than a decade, raising concerns about banks' funding costs and profit margins.